Global finance giant Mastercard is making more moves in two of the biggest talking points in global payments, Open Banking and cross-border transactions.
The US-headquartered firm, one of the leading companies in payments processing and card issuing alongside primary rival Visa, announced the enhancements in two separate updates.
Open Banking has been a key area of focus for the company of late, along with various other stakeholders in the global finance, banking and payments sectors. The firm’s most significant recent move is the creation of an Open Banking data command centre.
The centre has been named ‘Mastercard Connect Plus’, and has been set up with the goal of giving consumers more control of where, how and with whom their financial data is shared.
This is likely Mastercard seeking to address one of the main concerns many consumers have with Open Banking – how and where their data is shared. This concern has been holding back Open Banking adoption, something the financial sector and regulators have been encouraging, due to data sharing being critical to its function.
“Transparency is the key ingredient to instilling trust in the digital economy,” said Jess Turner, Executive Vice President and Global Head of Open Banking and API at Mastercard.
“When individuals and small businesses have agency over their financial data – who has it, where it’s going and how it’s being used – they can make informed decisions, access better opportunities and have more confidence that their financial data is just that – theirs.”
Mastercard is piloting Connect Plus this year and expects to make the centre fully available in the US in 2025. It is uncertain whether other markets will follow, but if the pilot and US launch are successful it would not be surprising to see Connect Plus taken live in other countries.
Turning to cross-border payments, the firm has added a suite of new features to its core offering to meet what it believes is rising demand among businesses, citing data from American professional services firm McKinsey showing 17% growth in cross-border payments to $240bn in 2022.
Mastercard’s new features in this space encompass near real-time payments, made available 24/7 365 days a year; settlement options to give banks more flexibility to optimise liquidity efficiencies; and a multilateral arrangement embedded to reduce counterparty risk and provide outcome certainty.
Additionally, the firm also states that it aims to leverage banks’ existing investments in the Swift global banking cooperative. It adds that the features have been made ‘fully compatible’ with existing correspondent banking arrangements between respondents and correspondents and that value added services have been tailored to banks’ ‘unique needs’.
Alan Marquard, Head of Transfer Solutions at Mastercard, shares: “By powering fast, predictable and transparent payments, Mastercard Move Commercial Payments will bring what is already the norm in domestic payments to the commercial cross-border payment space.
“Our latest product innovation aims to directly address the pain points that are currently affecting the commercial cross-border payments market. By shifting to this new model, they will be empowered to generate new revenue streams while reducing risk and enhancing the offering for their corporate customers.”
